Free tool
Enter your company's taxable profit to see the corporation tax due, with marginal relief, associated companies and short periods handled the way HMRC does it.
How UK corporation tax is worked out
Corporation tax is a tax on a UK company's taxable profits for its accounting period. For the financial year from 1 April 2026, HMRC's rates and allowances (updated 1 April 2026) set three bands:
| Augmented profits | What you pay |
|---|---|
| Up to £50,000 | 19% of taxable profits |
| £50,000 to £250,000 | 25% of taxable profits, minus marginal relief |
| Over £250,000 | 25% of taxable profits |
The marginal relief formula
HMRC's Company Taxation Manual (CTM03925) gives the formula:
Marginal relief = 3/200 × (U − A) × (N ÷ A)
U is the upper limit, A is augmented profits (taxable profits plus exempt distributions) and N is taxable total profits.
Between the limits, every extra pound of profit costs 26.5p in tax, which is why the effective rate climbs steadily from 19% to 25%. HMRC's own worked example, profits of £90,000 with £8,000 of distributions, gives tax of £20,406. This calculator returns the same figure; try it above.
When the limits change
- Associated companies share the limits: divide £50,000 and £250,000 by one plus the number of associated companies.
- Short accounting periods reduce the limits in proportion to the number of days.
- Close investment-holding companies and non-UK-resident companies can't claim marginal relief.
The tax is due 9 months and 1 day after the period ends, and the return 3 months later. The corporation tax deadlines guide has worked dates, and the CT600 page explains how FileMyLtd files the return.
FAQ
What are the corporation tax rates for 2026/27?
For the financial year starting 1 April 2026, profits up to £50,000 are taxed at 19% and profits over £250,000 at 25%. Between the two, companies pay 25% reduced by marginal relief. The rates are unchanged since April 2023.
How is marginal relief worked out?
HMRC's formula is 3/200 × (upper limit − augmented profits) × (taxable profits ÷ augmented profits). The relief is taken off tax at 25%. With no dividends from other companies, augmented and taxable profits are the same.
What are associated companies?
Companies under common control, broadly where the same person or group controls both. The £50,000 and £250,000 limits are shared between them: with one associated company, each company's limits fall to £25,000 and £125,000.
What if my accounting period is shorter than a year?
The limits shrink in proportion. For a six-month period the lower limit is about £25,000 and the upper limit about £125,000. Enter the number of days in the period to see the effect.
Is this calculator's answer final?
It is an estimate for a single financial year from 1 April 2026. Periods that straddle 1 April, losses, capital allowances and other adjustments change the figure. FileMyLtd works these out from your accounts when it prepares your CT600.
FileMyLtd calculates the tax from your approved accounts, applies marginal relief and files the CT600 with HMRC. You check every step.